Credit Conditions Survey Results Latest

The latest results from the Bank of England’s Credit Conditions Survey are in and credit conditions remain tight…

For Q1 of 2013 the results of the Credit Conditions Survey point to very little change for small businesses.

Credit availability has apparently increased for large businesses, a trend that follows Q4 of 2012 making for increased lending to large corporates for two consecutive quarters.

For small and medium-sized businesses access to funds remains tight with the expectation of little change again in the months ahead.

Lenders have stated that an improved economic outlook, increased competition in the lending sector and a change in appetite for risk have all had an affect on improving the availability of funds for businesses.

Kevin Caley, the Managing Director of investment club ThinCats.com, said of the latest Bank of England news:

“The statistics prove what we hear every day that despite being pushed and prodded at every turn, the banks still aren’t lending to small businesses. Many firms are so disheartened that they don’t even bother applying for credit because the perception is that lenders aren’t prepared to take the risk.”

A Damning Indictment of British Banks

Finance firm Touch Financial have also released figures showing that 55% of SMEs have been refused a business loan from their banks and 31% of those firms were given no reason for the refusal.

This comes after the Bank of England’s own outgoing boss Sir Mervyn King wrote a response to a business who was turned down a £10,000 loan for a van.

Writing to the Bank of England chief, businessman Mike Benson complained about having his loan application turned down by Halifax Bank of Scotland (HBOS).

HBOS is part taxpayer owned and Mr Benson decided to take his complaint to Sir Mervyn King.

Sir Mervyn replied saying that being offered "counselling" instead of a loan was "maddening" and that perhaps Mr Benson should seek an alternative lender. Sir Mervyn even suggested that Mr Benson try a Swedish bank, namely Handelsbanken.

The Touch Financial survey also found that 98 per cent of small and medium0sized businesses firmly believed that the government itself should do more to support small businesses.

Furthermore 81 per cent of businesses said that the banks were doing nothing to support small firms in this country.

Simon Carter, director of Touch Financial, said:

“SMEs are in danger of being left up the proverbial creek and being told there are no more paddles.”

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